There is little land available across the board for industrial developments in Orange County.
The highest and best use for former industrial properties is generally perceived to be high-density residential properties, which impedes the industrial market’s ability to grow.
There are small pockets of construction taking place, however, in North and West Orange County. Construction activity averaged 391,538 square feet through the first half of the year, a significant drop from the year-earlier average of 983,961 square feet. There are some planned industrial developments scheduled to break ground in Fullerton and Anaheim as we move into the second half of the year that are expected to deliver by the end of 2016.
Preleases and the lack of substantial new construction in the pipeline have undermined efforts to add adequate supply for tenants desiring quality product.
There were no office buildings completed in the second quarter, though the pipeline of product under construction grew and now totals 3.5 million square feet.
The 200 Spectrum Center tower was completed in the first quarter and already is 55.4% leased.
Notable Projects
Renovations of the Bespoke Irvine and The Habitat buildings in the Irvine Spectrum submarket started and are projected to be completed in next year’s first quarter at a total of 298,000 square feet.
Broadcom Ltd.’s 1.1-million-square-foot corporate campus is still projected to be completed in 2018. Other notable projects under construction in Orange County include the 537,224-square-foot Boardwalk project on Jamboree Road, which will be one of the first real creative-office campus developments in a market that notoriously has lacked creative inventory.
Look for continued growth of creative product in the market if Boardwalk and similar projects lease quickly.
Data and analysis provided by CBRE Research
